The euro gained momentum in the market following US CPI data that triggered volatility. It reached daily highs versus the US dollar, the yen and the Swiss Franc. Against the pound, it climbed to the highest since October 2016.
EUR/GBP broke above 0.9085 and jumped to 0.9117. The pair failed to hold on top 0.9100 and pulled back. Currently, it trades marginally above 0.9080, holding a bullish tone but the upside momentum eased after the beginning of the American session.
EUR/GBP Uptrend reinforced
The pair is about to post the highest weekly close since November 2009. If it rises back and holds above 0.9100 a test of 2017 high located at 0.9193 seems likely.
The pound continues under pressure still affected by the latest Bank of England meeting that took place last week and offered no signals of a potential rate hike in the short-term. On the opposite, the euro continues to receive support amid expectations that the European Central Bank could announce a tapering of its massive purchase program.
Another driver of the EUR/GBP is risk aversion. The risk-off environment of the last days favors the euro over the pound.
Next week, the key report from the UK will be inflation data, that could affect monetary policy expectations from the BoE. Regarding the euro, the ECB minutes could provide guidance on what the central bank is going to do with the QE program.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.